The European Commission has concluded the agreement of the finance ministers of the G7 countries on a global minimum tax of at least 15%. A small step towards a global corporate tax that could end tax havens and tax evasion.
The European Commissioner for the Economy, Paolo Gentiloni, has assured in a tweet that it is “A great agreement in the G7. Multinationals must pay their taxes where they make their profits. States have adopted a minimum tax of at least 15%. More justice and less tax evasion ‘
According to the EU Tax Observatory, the bloc it would raise an additional € 50 billion a year with a 15% corporate tax. But low-tax European countries like Ireland are still reluctant. “We have to be very aware of the fact that we have developed countries and we have developing countries, large countries and small countries and we have to accept that what is being proposed by the G7 may not necessarily be suitable for a vast majority of economies around the world. There is a way to go. But I am glad that you want to advance to a period with sustainable international taxation “, believes Renewing Europe MEP Billy Kelleher.
For it to be applied globally, an agreement must be reached at the OECD level. In the meantime, the EU is already working to change its tax system and, according to experts, a paradigm shift is on the horizon.“Since 2015, work has been done to avoid the transfer of profits and to ensure that companies pay taxes in the same places where they obtain their profits. There has been a lot of progress in 2021, in part due to the change of administration in the US “details Bruegel analyst Rebecca Christie.
Country-by-country fiscal transparency
This same week, a long-awaited agreement on a fiscal transparency tool was also closed in the EU. Large multinational companies operating in the EU must report country by country where they make profits and where they pay their taxes.
The agreement is far from perfect, since it will only be mandatory to disclose the information for EU countries and countries included in the list of EU tax havens. The socialist MEP, Ibán García del Blanco, believes that it’s a first step.
“From now on we will know everything that happens in the European Union. I would like to recall that 80% of tax evasion occurs within and between members of the European Union and we will also have certain, very detailed data on their activity in many tax havens. Then, today we are better than yesterday and we must assess what we have and, above all, that, from this moment, we will advance from a position that is already conquered. At the moment we already have rules on fiscal transparency and he wants to remember that we are the first place on earth that has something like this “, explains García del Blanco.
It is not yet clear what the post-pandemic world will look like. But it seems that the funds needed for recovery could usher in a new era for taxation.